Future outlook enhanced by Google Trends

The Household Spending Intentions (HSI) series for November showed solid improvement for both Home Buying and Retail spending intentions. Lower interest rates following the November RBA monetary policy easing and the reopening of large parts of the economy supported spending intentions in the month. Both Entertainment and Motor vehicle spending intentions were a little higher in November. Travel spending intentions were flat on the month, while in contrast, Health & fitness and Education spending intentions both declined in November. The good news is that the recently released Q3 20 national accounts showed that the Australian economic recovery is well underway. Perhaps more importantly, we expect a further rise in GDP in Q4 20, meaning that the economic contraction for 2020 is expected to be ‘just’ –2.8%. This will mean that Australia will likely have one of the shallowest recessions of all major economies in 2020.

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New perspectives can keep you one step ahead

Whether you are running a business, a policy maker, an investor or one of Australia’s corporate enterprises - insights on shifting consumer spending intentions are critical in planning for the future. Our Household Spending Intentions series combines our spending data, one of Australia’s largest financial data sources, with Google Trends publically available search activity. By connecting actual spending data to intentional data, our analysis provides an early indication of prospective spending trends across seven key sectors. This series covers about 55% of the total household spend. Future releases will look to expand our coverage to the  remaining spending components.

Data-driven insights can give your organisation a new perspective and help you keep a step ahead.

Home Buying Spending Intentions

Home buying spending intentions

  • Home buying spending intentions jumped higher in November, consistent with our expectations that the improvement in the Australian economy and the further interest rate cuts associated with the RBA’s November easing of monetary policy would see a restrengthening of the home buying market
  • While the number of Google searches related to home buying actually declined in November, the number of home loan applications jumped solidly in the month
  • The improvement in Home buying spending intentions has also led to a rise in house prices, which were up 0.7%/mth in November (based in CoreLogic data) and up 2.4%/yr

Retail Spending Intentions

Retail spending intentions

  • Retail spending intentions rose in November – consistent with the lifting of restrictions in Victoria and our credit/debit card spending data. The increase came in both actual spending activity and Google searches
  • November showed improvement in spending on clothing and footwear, general retail, household furnishings and equipment, personal care and recreation spending
  • November saw very strong increases on an annual rate for spending on clothing, bakeries, grocery stores & supermarkets, department stores, furniture, flooring & upholstery stores, paint and hardware stores, household appliances, art & craft supplies, book stores, digital apps, electronic stores, florists, hobby stores, pet shops and record stores

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • Motor vehicle spending intentions improved in November. While the number of Google searches declined marginally, actual spending on motor vehicles and personal loan applications to purchase a motor vehicle both increased on the month. We have seen car imports lift in recent months as well
  • The ongoing improvements in the housing sector should help the outlook for the motor vehicle sector. Generally, spending on motor vehicles has the highest response to changes in property prices according to research published by the RBA
  • Working against this trend is the increasing shift to work-from-home

Entertainment Spending Intentions

Entertainment spending intentions

  • Entertainment spending intentions were marginally stronger in November. While Google searches were flat on the month, actual spending increased a little
  • The strongest increases in spending in November were seen in off-premise alcohol, eating out/restaurants, fast food restaurants, boat rentals, bowling alleys, pay TV, digital books/movies/music/games, music stores and video games
  • This category is benefiting from the easing of restrictions which have lifted capacity at entertainment venues
  • Weakness is still evident in spending on live music, billiards/pool establishments, dance halls/studies/schools, movie theatres and live performance theatres. We could see some improvement in these areas as capacity restrictions are eased

Travel Spending Intentions

Travel spending intentions

  • Travel spending intentions tracked largely sideways in November, with some hints of improvement as state borders reopen
  • While Google searches for travel related spending declined in November, there was some improvement in actual spending in November 2020 compared with November last year. This included spending on aquariums, camping & recreational trailer dealers and trailer parks & camp grounds
  • Weakness is still evident in spending on many travel related sectors, such as airlines, hotels, motels & resorts, cruise ships, travel agencies, car rentals and bus lines. We would expect this to change as capacity returns to air travel and as confidence builds that states borders are open and will remain so

Education Spending Intentions

Education spending intentions

  • Education spending intentions declined further in November. While the number of transactions increased in November, Google searches were lower on the month and the value of transactions was only slightly changed on an annual basis
  • For November 2020 vs November 2019, there was a large increase in the value of transactions for business & secretarial schools and a smaller increase in elementary and secondary schools. The value of spending on colleges & universities, correspondence schools and trade & vocational schools was down in November

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • Health and fitness spending intentions declined in November, led lower by Google search activity. Actual spending activity was up on the month
  • Spending activity was up in November this year vs last year, with gains seen in sports apparel, chiropractors, dentists, doctors, hospitals, optometrists and podiatrists. Strong gains also continue to be seen in bicycle shops – sales and repairs, public golf courses and sporting goods stores
  • Spending remains soft for ambulance services (which is a good thing) and professional sports clubs

Enhanced by Google Trends

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